More and more consumers are shopping xe2x80x9conlinexe2x80x9d, that is through the Internet, because of convenience, wider selection and most of the time, better pricing. Internet is synonymous to a global computer network. This type of marketing has cut the cost of the middlemen. This method of marketing is also favorable to the manufacturers and service providers because they can sell directly to the consumers and retailers without the need of distributors and nation wide warehouses. This increase in online purchasing of goods and services, herein collectively referred to as products, has also created the need for electronic coupons which are provided by manufacturers and service providers to consumers as marketing incentives. Manufacturers and service providers, are also herein collectively referred to as providers. Electronic coupons are similar to the traditional paper printed coupons which are submitted by consumers when purchasing a particular good or service in exchange for a monetary discount in price or a rebate except that electronic coupons are retrieved and/or printed online by consumers and retailers, herein also referred to as users. These coupons typically contain product information, the coupon amount, expiration date, and in some, transaction data such as the number of allowable coupon per user and the total number of coupons allowed for a given promotion, herein also referred to as certificate marks. These certificate marks may be accompanied by other identification data which are printed in numbers, letters, bar codes, combination of these, or other symbols that uniquely identify each coupon, herein also referred to as identification mark.
Printed coupons have been faced with both retailer and consumer fraud, referred to as coupon fraud, which have necessitated the additional printing of unique certificate and identification marks. The exact percent of coupon frauds related to traditional newspaper printed coupons is unknown, because there are only primitive techniques available to suspect potential frauds, with very limited tools and audit trail to isolate the fraudulent activities. Some experts have stated that coupons frauds are about 25%, and most agree that retailer coupon frauds are significantly more of a concern than consumer coupon frauds.
Electronic coupons are expected to experience the same or even greater coupon fraudulent practices because of the convenience of printing several copies of the coupon online by a user. This fear of influx of consumer and retailer coupon fraud have created some resistance in adapting electronic coupons among providers especially those that produce and sell high priced merchandise. Golden, et al. in U.S. Pat. No. 5,761,648 attempted to address this issue by providing an online coupon issuing service which identifies and marks each electronic coupon or certificate with a code distinguishing a particular certificate from all other certificates, referred to as unique certificate mark and another code identifying the user, referred to as unique identification mark. In addition, the data processing system within the online coupon issuing service, limits the total number of certificates to be issued, as well as the number of certificates to be issued to each individual and makes these actual transactions of printing the certificates by the users available in a report form. While the system of Golden prevents some form of coupon fraud, it is ineffective because its traceability ends at the point of printing the coupon. The system of Golden does not provide an efficient system for tracing whether or not an actual use of the product coupon occurred at the point of sale where most of coupon fraud occur. More specifically, the system does not provide an audit trail for tracing a particular sale transaction to a validated sale by a validated consumer. While providing a PIN (personal identification number) identifies a consumer/user and if set-up to do so, the demographics of such user as to location of sale, etc., such security measures only ensure that the coupon is valid and was issued to a consumer/user having an issued PIN. There are no built in safeguards prior to the issuance of a PIN number such as verifying that such consumer is not a fictitious person, that is, it does not tie the provided information such as a credit card number to the database of the credit card issuer or if a bank checking account is provided instead of a credit card, to an issuing bank. Additionally, even if issuance of the PIN is verified with the credit card issuer or the personal check to an issuing bank, a retailer can still gather these legitimate coupons, submit these to the provider for reimbursement without having an actual sale transaction take place. Scanning a coupon before credit deduction from the consumer""s bill only protects the retailer in ensuring the validity of the coupon. The PIN does not address the issue when it is the retailer that commits the coupon fraud as stated above. Further, the system of Golden is inapplicable to the traditional paper printed coupon.
A retailer coupon fraud is commonly committed by a retailer submitting several providers"" coupon to the provider for reimbursement on non-bonafide sales or fictitious purchases. A coupon that has unique markings, such as that proposed by Golden, will not deter retailer coupon fraud because a retailer can just gather several of these coupons, submit them to the provider and get the reimbursement without having to link such coupons to actual sale transactions. Consequently, a provider will experience a loss by reimbursing the retailer without getting the benefit of generating the revenue from an actual sale of the product, as well as a loss of an opportunity for generating a potential repeat customer or consumer by the retailer hoarding such coupons. Combining the unique certificate mark with the unique identification mark, as proposed by Golden, does not provide a solution to the problem because a retailer can ask several living individuals and fictitious individuals to print these electronic coupons and submit these to the providers without requiring these individuals to actually buy the product.
A consumer coupon fraud is usually committed by unauthorized copying of the product coupon, counterfeiting, unauthorized tampering of the value and expiration date of the coupon, unauthorized creation of a special promotion and by printing or getting several coupons which a consumer or a single household uses by going back and forth to a store or several stores to purchase the same specified product that is, doing multiple redemption of the coupon. The latter type of consumer fraud is usually of a lesser monetary loss to a provider. However, these type of fraud is rampant and often ignored by a retailer. The providers experience loss by defeating the purpose of the coupon, that of promoting the product through the issuance of a discount coupon, as an incentive for the consumer to try the product at the discounted rate. Because these coupons are provided in limited quantity and usually for a limited time, the use of several of these coupons by one consumer prevents the provider from reaching a greater number of consumers belonging to different households. Golden et al. deters only the copying of the product coupon through the printing of a unique identification mark for each certificate or coupon. However, like the retailer coupon fraud, the unique marks do not deter the printing of several legitimate coupons by as many members of a household, not ignoring the potential for the same household using fictitious users to print more coupons. One household can potentially print a sizeable percentage of the total allowable coupons thereby minimizing the widespread distribution of these coupons.
The present invention addresses both the retailer and consumer fraud by providing traceability prior to the issuance and/or printing of the coupon, prior to a retailer acceptance of the coupon and more importantly, traceability of the product coupon at the point of sale. The system places value on consumer validation, and educates the industry to enforce the necessity and policy of only accepting traceable purchases by credit card, smart card, cash card and the like, collectively referred herein as credit card, or by personal check, for all types of coupons. Utilizing the claimed invention provides the necessary audit trail that enables the providers to aggressively deter and reduce both types of coupon frauds, and additionally provide the required evidence to prosecute retailers for their criminal activities, if desired. The system generally accomplishes this by requiring consumer membership prior to issuance of the coupon, limiting the sale to credit card or check payment, that is, no cash purchase is allowed with coupon redemption, and requiring or providing user validation and verification at the point of sale with an actual sale reported or transmitted to a database having a traceable retailer file or if applied to a traditional paper printed coupon or third party coupons, a proof of sale imprinted on the coupon. Imprinting may be done manually or electronically through a printer.
It is an object of this invention to provide both printed and electronic coupons that are traceable at the point of sale thereby deterring and reducing both retailer and consumer fraud.
It is also an object of this invention to provide a system for using traditional paper coupons and current electronic coupons with or without printed unique identification marks by implementing the security devices of this invention.
The issuance and printing of manufacturing coupons with certificate marks, and/or identification marks and/or encrypted security marks are known. Online printing by users of coupons, referred to as electronic coupons, the coupons bearing information or data supplied by the manufacturer or a service provider, is also known. See U.S. Pat. Nos. 5,907,830; 5,761,648; and, 5,305,197 as examples. These on line processes generally involves a provider or a provider with a service center, the service center herein also referred to as coupon issuer, in electronic communication with each other, generating providers"" coupons for users"" perusal and storing these in a data base ready to be printed by an interested user. Current or known coupons generally contain the product information, amount of the coupon, expiration date and optionally, marketing data, identification information and security codes to uniquely identify the user and/or the promotion for verification on the authenticity of the respective coupons. Although the claimed invention proposes its own unique provider coupon and its method/s of issuance, printing and redemption of these coupons, all of these current or known coupons issued on line or paper printed and the processes for generating these can be modified and adapted to any one of the processes of the claimed invention to deter or reduce coupon fraud. The present invention provides a system for deterring and reducing coupon fraud by building in security measures both in the process and in the printed coupon.
The invention utilizes an interactive online database system, herein referred to as IODS, which operates on a membership basis where users are validated and each given an identification number or mark. An interactive online database system used in this invention is a sophisticated combination of three subsystems all working together to perform the different operations or process steps described by the different claimed methods.
A method for registering a first time coupon user as a member consumer/user into the coupon program described herein comprise the steps of entering a prescreening information such as a unique user name, a password and any other information requested by a service center or a provider to an interactive selection by the member consumer/user. A registered member of the IODS enters 32 his/her user name also referred to as assigned identification mark and password for verification 33 by the IODS 1. Once verified for its validity, the IODS 1 will issue 34 a unique coupon 25 preferably with an encrypted serial number to the member consumer/user""s remote user computer terminal 6, so that the coupon 25 may be printed 35 immediately or retrieved a second time from the service center 22, if the original printed coupon was lost or damaged, and printed on the member consumer/user""s printer device 49 (not shown). The service center will issue a substitute identical coupon as the original for lost or damaged coupon to enable traceability if the member consumer/user has used the original coupon because the duplicate usage will be identified and detected once the original and the substitute coupons are scanned. Validity criteria are the same as the above real time online process. In a paper printed coupon, the above steps are accomplished with the distribution of the providers"" coupons through known marketing media. If the user name and/or password is not valid, the member consumer/user is advised by the IODS 1 to contact 36 the provider or service center representative. The member consumer/user brings the provider coupon 25 to a retailer/user 40 and upon presentation 50 of the coupon 25 for a card payment, the retailer matches the name in the coupon with the name on the credit card, personal bank check or any other valid form of identification, punches in or enter 51 the amount of the sale and requests the user to make his/her payment by sliding his/her credit card for payment validation by the card provider. For payment by a personal bank check, the check is validated by a member consumer/user presenting a picture identification such as a valid driver""s license to the retailer/user and by writing 52 the personal bank account and/or check number on the provider""s coupon 25. The check number written on the coupon will be the retailer""s proof of the purchase. The retailer/user 40 gathers 53 all the validated provider coupons 25 received, and forwards 54 these by mail or shipment with his retailer identification number or other forms of identification to the provider 16 or service center 22 whose address is printed on the coupon, or to a selected retail clearing house selected by the retail store to sort and ship 54 these coupons 25 for them. The coupon 25 must be returned to the appropriate service center 22 for coupon scanning, decoding, and validation. Upon acceptance by the service center 22, The IODS 1 will download 55 the most recent copy of the coupon database and activity into a scanning system 9 which will scan, decode, validate and record 56 each coupon 25, the good coupons will be counted 58 and any coupons that were tampered, falsely created, or photocopied will be identified and recorded 59. After completion of every submission, accounting and verification of all coupons submitted by a retailer, the IODS 1 database is updated. The latest retailer redemption activity will be documented 60 in a coupon validation report. The coupon validation report, along with the physical coupon received by the service center, will be forwarded 61 to the provider or its agent who will review 62 the coupon validation report and reimburse 63 the retail store for the member consumer/user submitted coupons. For any anomalies, the provider may choose to audit 64 the retail store for potential coupon fraud. This audit trail, made possible by using an IODS, allow the product and service providers to isolate the cause of fraud, and therefore deter and reduce future coupon fraud by the users.
The use of providers coupon covered by the claimed invention may be accomplished in several ways. One method is done purely online and on real time basis resulting in a paperless transaction, another methods is a combination of online and manual operation while the other method covers the adaptation of an existing third party paper or electronic coupon to the methods of the claimed invention. A method for online, real time coupon issuing and redeeming of a desired provider coupon by a member consumer/user, comprise the steps of entering a resident zip code of the member consumer/user to an interactive online database system of a service center or a provider; displaying available provider coupons for the member consumer/user by the interactive online database system; selecting a provider coupon or coupons from the available coupons by the member consumer/user; entering a service center assigned identification mark or user name and a member consumer/user password into the interactive online database system, the interactive online database system checking its database to verify the assigned identification mark and password, tying the assigned mark and password to the member consumer/user, determining a number of times the member consumer/user has requested the selected provider coupon, approving or disapproving the member consumer/user request for the provider coupon and allowing the issuance of the provider coupon, the issued coupon tied to a member consumer/user identification mark and password; transmitting the provider coupon with a product order by the member consumer/user to a retailer""s computer; entering a sale or a plurality of sale of a product by a retailer; validating payment of the sale by a credit card or a bank check; forwarding a sale confirmation number and retailer identification number to the service center; recording the sale to the retailer by the service center; crediting the retailer with an amount specified on the provider coupon; reimbursing the retailer of the credit at a time specified by the provider; and, updating the interactive online database after each reimbursement of the retailer.
For coupon issuance and redemption at a retailer without online, real time connection with an interactive online database system of a service center and a payment center, a hybrid method of online and manual operation, the method comprises the steps of entering a resident zip code of a member consumer/user to an interactive online database system of a service center or a provider; displaying available provider coupons for the member consumer/user by the interactive online database system; selecting a provider coupon or coupons from the available coupons by the member consumer/user; entering a service center assigned identification mark or user name and a consumer/user password into the interactive online database, the interactive online database checking its database to verify the assigned identification mark and password, tying the assigned identification mark and password to the member consumer/user, determining a number of times the member consumer/user has requested the provider coupon, approving or disapproving the member consumer/user and allowing the issuance of the provider coupon, the issued coupon tied to a member consumer/user identification mark and password; printing the provider coupon by the member consumer/user; bringing and presenting the provider coupon by the member consumer/user to a retailer; entering a sale or a plurality of sale of a product by the retailer; validating payment of the sale by a credit card or a bank check; forwarding a number of gathered validated provider coupons generated from the sale or plurality of sale of the product to the service center; scanning, decoding and validating the provider coupons forwarded by the retailer; identifying fraudulent coupons from legitimate coupons; preparing a provider coupon validation report by the service center; forwarding the coupon validation report and the gathered provider coupon to the provider; reviewing the coupon validation report by the provider; and, reimbursing the retailer for the amount of the desired coupons. The IODS is updated after each reimbursement of the retailer.
A preferred provider""s coupon proposed by the claimed invention for used with the above claimed methods includes aside from the product information, the following information: name of the member consumer/user and the name of the spouse, if requested, e-mail address, date of issuance or printing of the coupon, a blank space to fill in date of purchase, a blank space to write in the initial of the member consumer/user, a blank space to write in the personal account and/or check number if paying by check, coupon value, expiration date, sales order number, provider""s barcode, unique membership identification number, instructions to cashier to check identification and to accept purchases only with a credit card payment method or by personal check, mailing address of the administrator for the service center or provider where the retailer can submit used member consumer/user coupons for reimbursement and a unique encrypted serial number, if desired. The printing of the member consumer/user name in the provider""s coupon is a must for the hybrid method to enable the security measures. This enables the retailer to match the name of the member consumer/user with the name on the credit card or bank check to prevent consumer fraud. The service center certification mark generally includes sales order number, coupon value, expiration date, provider""s barcode, instructions, mailing address of administrator and the date of issuance or printing of the coupon. The service center identification mark general includes the member customer/user name, e-mail address, unique membership identification number, date of purchase, customer""s initials, personal check number, and optionally, a unique encrypted serial number.
For electronic coupons, all of the preferred information can be easily printed on the provider""s coupon much like a personal check. For third party coupons without the above printed information on the coupon and for those issued by other than the system herein, these may be used by separately entering, punching in, and imprinting the above preferred information by the IODS at the point of sale using the retailer""s remote terminal, such as an electronic card programmer, once a consumer/user agrees to sign up for membership which follows the same membership application process as described above. A member consumer/user can also use third party coupons and need not sign up again for membership.
For current printed and online third party generated provider coupons, collectively referred to as third party coupon, the method of issuance and reimbursement of these coupons comprise the steps of bringing and presenting the third party coupon by a consumer/user to a retailer; scanning the third party coupon by the retailer; signing up for membership by the consumer/user; entering a service center assigned identification mark and a consumer/user password into an interactive online database of a service center or a provider, the interactive online database checking its database to verify the assigned identification mark and password, tying the assigned mark and password to the member consumer/user, approving or disapproving the use of the third party coupon by the member consumer/user; entering a sale or a plurality of sale of a product by the retailer; validating payment of the sale by a credit card or a bank check; imprinting a service center certificate and identification marks on a surface of the third party coupon; forwarding a number of gathered imprinted third party coupons generated from the sale or plurality of sale of the product to the service center; scanning, decoding and validating of the third party coupons forwarded by the retailer; identifying fraudulent coupons from legitimate coupons; preparing a coupon validation report by the service center; forwarding the coupon validation report and the gathered third party coupon to the provider; reviewing the coupon validation report and the imprinted third party coupons by the provider; and, reimbursing the retailer for the amount of the desired coupons.
In the above methods, if allowed by the provider, the retailer can also be the consumer, in which case the same identification mark or user name is entered for the issuance of the coupon and for crediting the coupon amount which the provider later reimburses. These methods provide an audit trail which verifies a user, prevents a consumer/user from printing or using the same coupon beyond the allowable number for each user, requires a verifiable purchase, and credits the retailer/user only with verified purchases.
With this system, a counterfeit coupon will not hurt the provider because there is an internal check for the number of usage and more importantly, credit is given only after a bonafide purchase. In lieu of on line real time check approval, payment by check can be validated by a member consumer/user presenting a picture identification such as a valid driver""s license to the retailer/user.